Ex-CEO accused of stealing from Jewish charity

The former CEO of a prominent New York City charity, who apologized when he was fired for what he called “mistakes,” was charged Tuesday in a decades-long, $5 million scheme that involved overcharging the organization for insurance and making illegal campaign contributions.

William Rapfogel is accused of stealing $1 million since 1992 from the Metropolitan Council on Jewish Poverty, which he ran until being fired last month. He was arrested on felony charges that include grand larceny, money laundering, criminal tax fraud, and conspiracy, Attorney General Eric Schneiderman said.

Schneiderman said Rapfogel directed a co-conspirator at insurance company Century Coverage Corp. to use money pocketed from the scam to make political donations to candidates and political groups for the charity. Candidates for New York City, state, and federal offices received campaign contributions of tens of thousands of dollars from the insurance company owners and employees, Schneiderman said.

He said the campaign contributions were illegal and said they dated to the 1990s. The donations were often divided into smaller contributions to take advantage of the city’s campaign financing system, which provides 6-to-1 matches of smaller donations with public funds, court records stated.

The candidates and political organizations weren’t named in court papers. Schneiderman’s office didn’t respond to questions about why the names weren’t released.

After the allegations emerged in August, several New York City Democratic mayoral candidates who had received Century Coverage Corp.-related contributions, mostly years ago, said they would return them.

Among them was now-nominee and current Public Advocate Bill de Blasio, whose campaign confirmed Tuesday it’s returning $1,650 given in the 2009 election cycle. City Council Speaker Christine Quinn‘s campaign said it returned $25,000 in 2007 donations associated with Century.

“Because of the alleged terrible actions of Mr. Rapfogel, hungry people are not going to get fed,” Quinn said, noting the city has frozen funds for food and other programs run through the Met Council.

In court, Rapfogel, in a dark suit and a yarmulke, entered no plea to the charges, which is common at this stage of such a case, and was expected to be free on $300,000 bond.

“Mr. Rapfogel hopes for a fair resolution of this case and will continue to make amends to Met Council,” his attorney, Paul Shechtman, said outside the court. “It’s a sad day, but happily, people who know Willie well are still in his corner.”

The charity runs social welfare programs for the poor including food and housing services and offers help to address domestic violence.

“It’s always sad and shocking when we discover that someone used a charity as their own personal piggy bank,” Schneiderman said.

Court records say the scheme began months before Rapfogel was hired in 1992, and one unidentified informant from the charity told investigators that Rapfogel “was informed of the scheme and began receiving proceeds from the scheme, mostly in cash.”

The charity cited “financial irregularities” and “apparent misconduct” when it ousted Rapfogel. Schneiderman said more than $400,000 in cash was hidden in Rapfogel’s home, although he is accused of $1 million in illegal gain. Rapfogel is also accused of using $27,000 in the charity’s funds to pay a contractor working on his home.

Rapfogel’s wife is chief of staff to state Assembly Speaker Sheldon Silver. No official made any connection between the donations and Silver’s office.

Schneiderman worked with state Comptroller Thomas DiNapoli in their continuing partnership to investigate public corruption.

“The scale and duration of this scheme are breathtaking,” DiNapoli said. “When individuals in the mission of helping others instead help themselves, it is particularly egregious.”